GOP tax law will devastate New Yorkers (Commentary)

Posted Mar 28, 2018

Supporters of CNY Solidarity Coalition hold a protest rally against the proposed federal tax cut bill Dec. 6, 2017, outside the office of Congressman John Katko at 440 S. Warren St. in downtown Syracuse. The bill since passed Congress and was signed by President Donald Trump.(Michael Greenlar | mgreenlar@syracuse.com)

On Monday, March 19, U.S. Senator Chuck Schumer was in town to speak out about the negative local impacts resulting from the Republican tax bill enacted in December. He was joined by members of the Syracuse Common Council, Onondaga County Legislature and other local advocates for health care, education, and jobs.

Many of the problems with this bill are well-known, but some local impacts have not yet received the attention they deserve.

Schumer was among the speakers who emphasized the unfairness of the tax cuts included in the new law. The law cuts the corporate tax rate from 35 percent to 21 percent and reduces the top personal rate from 39.6 percent to 37 percent. In addition, it limits the alternative minimum tax and the estate tax in ways that only benefit the wealthy.

It cuts taxes for some middle-class Americans -- but the bill makes working class families an afterthought. Many have heard about the secretary in Lancaster, Pennsylvania, whose take home pay went up by $1.50 per week. Speaker of the House Paul Ryan tweeted about how happy she was to have the extra spending money.

To make matters worse, most of the tax breaks for corporations and wealthy individuals are permanent, while reductions for the middle class are scheduled to phase out by 2027, ultimately resulting in a tax hike.

At Monday's event, Common Councilor Joe Driscoll emphasized that this tax law is the most recent iteration of a longstanding Republican economic agenda that has led compensation for the top 100 corporate CEOs to increase from 77 times the pay of their average employee in 1970 to 844 times in 2014. "What does it feel like to make 844 times your employees?" Driscoll asked.

The law's shifting of tax burdens from some taxpayers to others will hit New Yorkers particularly hard. One of its most controversial provisions establishes a cap of $10,000 for deducting state and local taxes, the primary source of funding government services and public education in New York. This provision means that New Yorkers who pay more than $10,000 annually in state and local taxes will now be double-taxed on that income. It also means that congressional Republicans are using the tax code to attack states that prioritize government services and the public good--making it all the more inexplicable that New York Reps. Claudia Tenney, John Katko, Tom Reed and Chris Collins voted for the bill.

These tax cuts will also devastate the federal budget, which is projected to take a $1.5 trillion hit over the next 10 years. County legislator Peggy Chase emphasized the impact of government healthcare programs, including Medicare and Medicaid. NYSUT's Ian Phillips emphasized the hit to public education budgets in Central New York school districts in Auburn, Baldwinsville, Syracuse and elsewhere. New York school districts are already short-changed by federal education budgets, with the federal government providing only 4 percent of total funding, compared to more than 30 percent for some districts in other states. In urban districts like Syracuse, this shortfall is exacerbated by longstanding patterns of underfunding at the state level.

It would be one thing if all these cuts had offsetting benefits in terms of job creation and economic growth, but as Common Council President Helen Hudson indicated, that seems very unlikely to be true. As soon as the act was signed, corporations rushed to brag about all of the benefits their employees would reap. But a quick look under the hood and most of these claims fall apart.

Walt Disney announced one-time bonuses for its 125,000 employees, but then said that its unionized workers--35,000 of them--wouldn't get them without contract concessions on other fronts. Walmart promised one-time bonuses too, plus new benefits for parental leave and adoption. But it announced on the same day that it was closing 63 Sam's Clubs, resulting in lost jobs for 10,000 workers, including 151 here in Syracuse. This is one of four worksites here in NY24 that have closed since the tax bill was enacted, with 425 workers laid off.

As Schumer emphasized, rather than job growth or wage increases, many corporations are using the new revenue freed up by the tax bill for stock buybacks, which primarily benefit corporate CEOs and other wealthy shareholders.

It is clear beyond measure that President Donald Trump does not care about working people. The same is true for his Cabinet, with its record number of millionaires and billionaires, several of whom have been caught spending taxpayer dollars on fancy tables and honeymoon vacations. I appreciate Schumer and our local elected officials for standing up to say no to this agenda.